SOURCE: Symantec

November 01, 2005 16:05 ET

Symantec Reports Solid Second Quarter Earnings

Results Driven by Large Deals, Demand for Market-Leading Security and Availability Solutions

CUPERTINO, CA -- (MARKET WIRE) -- November 1, 2005 -- Symantec Corp. (NASDAQ: SYMC) today reported results for the second quarter of fiscal year 2006, ended Sept. 30, 2005. GAAP revenue for the September 2005 quarter was $1.056 billion and non-GAAP revenue was $1.192 billion. Non-GAAP revenue includes $136 million of deferred revenue that has been eliminated from GAAP results as part of the purchase accounting associated with the acquisition of VERITAS Software Corporation. On a non-GAAP basis, revenue grew 8 percent over the September 2004 quarter's combined non-GAAP revenue of $1.103 billion.

GAAP Results: The September quarter's GAAP net loss was $251 million, resulting in fully diluted GAAP loss per share of $0.21. The loss was driven primarily by the write-off of $284 million in IPR&D expense associated with the acquisition of VERITAS, in addition to other merger-related acquisition and restructuring charges.

Non-GAAP Results: Non-GAAP net income was $273 million for the second quarter, 16 percent higher than the September 2004 quarter's combined non-GAAP net income of $235 million. Non-GAAP fully diluted earnings per share for the quarter was $0.23, up 21 percent as compared to our combined non-GAAP earnings per share of $0.19 in the September 2004 quarter.

Non-GAAP results, as presented in the attached consolidated statements, exclude certain non-GAAP expenses, net of tax, and include VERITAS results of operations for the applicable periods, including adjustments based on the fair values of assets acquired and liabilities assumed as of the acquisition date of July 2, 2005 and deferred revenue that was eliminated as a result of purchase accounting for the VERITAS acquisition.

"We are very pleased with our first quarter of combined operations," said John W. Thompson, Symantec chairman and chief executive officer. "Our team remained dedicated and focused on serving the needs of customers, resulting in solid September quarter results. We remain excited by the interest we're seeing from both customers and partners around the world."

Revenue Components

For the quarter, Symantec's worldwide enterprise security business, which includes Symantec's enterprise security solutions, as well as response and managed security services, represented 22 percent of total revenue and grew 11 percent on a combined non-GAAP basis year-over-year. Symantec's storage management segment, which includes Symantec's cloning and imaging products and VERITAS' Foundation Suite and Utility Computing solutions, represented 21 percent of total revenue and grew on a combined non-GAAP basis by six percent year-over-year. Symantec's Data Protection segment, which is comprised of Backup Exec, Net Backup and Enterprise Vault solutions, delivered 24 percent of total revenue and grew two percent on a combined non-GAAP basis year-over-year. Symantec's consumer business represented 29 percent of total revenue and grew ten percent on a combined non-GAAP basis year-over- year. Services revenue, which is comprised of consulting and education, represented four percent of total revenue and grew 41 percent on a combined non-GAAP basis year-over-year.

International revenues represented 49 percent of non-GAAP revenue in the second quarter and grew 15 percent on a combined non-GAAP basis over the same quarter last year. The Americas, including the United States, Latin America, and Canada, represented 56 percent of total revenue and grew 3 percent on a combined non-GAAP basis year-over-year. The Europe, Middle East, and Africa region represented 30 percent of total revenue and grew 11 percent on a combined non-GAAP basis year-over-year. Asia Pacific/Japan represented 13 percent of total revenue and grew 25 percent on a combined non-GAAP basis year-over-year..

December Quarter Forecast

For the December 2005 quarter, GAAP revenue is estimated at $1.165 billion. This excludes $98 million of deferred revenue that was lost through the purchase accounting for the VERITAS transaction. Including this deferred revenue, Symantec's non-GAAP revenue for the December 2005 quarter is estimated at $1.263 billion, six percent higher than the combined non-GAAP revenue from last December.

GAAP fully diluted earnings per share for the December quarter is estimated at $0.10. Non-GAAP fully diluted earnings per share, including $98 million of VERITAS deferred revenue that was eliminated as part of the purchase accounting, and excluding all merger-related costs, restructuring charges, and deferred compensation expenses, is forecasted at $0.25.

Fiscal Year 2006 Forecast

For the fiscal year ending March 2006, GAAP revenue is estimated at $4.2 billion. This excludes $288 million of deferred revenue that was lost through the purchase accounting for the VERITAS transaction and $559 million of revenue related to VERITAS for the quarter ended March 31, 2005. Including the $288 million of deferred revenue lost through the purchase accounting and including the $559 million of VERITAS March quarter revenue, Symantec's combined Non-GAAP revenue for fiscal 2006 is estimated at $5 billion, 8 percent higher than the combined non-GAAP revenue for fiscal 2005 of $4.625 billion.

GAAP fully diluted earnings per share for the fiscal year ending in March 2006 is estimated at $0.19. Non-GAAP fully diluted earnings per share, including the net income effect of VERITAS deferred revenue that was eliminated during the purchase accounting and including the VERITAS results for the March 31, 2005 quarter, and excluding all merger-related costs, restructuring charges, and deferred compensation expenses, is estimated at $0.99.

Quarterly Highlights

--  Symantec signed 843 contracts worldwide worth more than $100,000 each,
    including 67 deals worth more than $1 million each, during the quarter.
    Forty percent of these deals included multiple Symantec enterprise products
    and services.
--  Symantec signed new or extended agreements with customers including
    the United States Air Force; Advanced Micro Devices, a leading provider of
    microprocessors, Flash memory devices, and silicon-based solutions for
    communications and computer companies worldwide; First American
    Corporation, one of the nation's leading financial services organizations
    for business information; Constellation Energy, a FORTUNE 200 company and
    the nation's largest competitive supplier of electricity to large
    commercial and industrial customers; Unisys, a global provider of
    information technology services; City of Chicago Business Information
    Services, a business improvement organization that assists city departments
    in redesigning business operations and leveraging technology to solve
    business issues; and Gwinnett County Public Schools, Georgia's largest
    school system with over 140,000 students on 99 campuses in the metro
    Atlanta area.
--  International customers from the quarter included: Toronto Catholic
    District School Board, a religious educational community of 95,000 students
    in 201 elementary and secondary schools located throughout Canada's largest
    city; Coop Danmark A/S, the leading consumer goods retailer in Denmark,
    with approximately 64,000 employees and DKK100 billion (US $16 billion) in
    annual revenue; and Financiera Compartamos, an enterprise dedicated to
    providing financial services for small and micro business in Mexico.
    
Conference Call

Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results of the second quarter of fiscal year 2006, ended Sept. 30, 2005, and to review guidance for the fiscal year 2006. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest/index.html. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. A replay and script of our officers' remarks will be available on the investor relations' home page shortly after the call is completed.

About Symantec

Symantec is the world leader in providing solutions to help individuals and enterprises assure the security, availability, and integrity of their information. Headquartered in Cupertino, Calif., Symantec has operations in more than 40 countries. More information is available at www.symantec.com.

FORWARD LOOKING STATEMENTS: This press release contains statements regarding our financial and business results which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements relating to projections of future revenue and earnings per share. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: the success of the VERITAS merger, including successful integration of VERITAS' businesses, maintenance of customer and partner relationships and leveraging of synergies; the sustainability of recent growth rates, particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security and international; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; general market conditions; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; whether Symantec can successfully develop new products and integrate acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors section of Symantec's Form 10-Q for the quarter ended July 1, 2005. Symantec assumes no obligation to update any forward-looking information contained in this press release.

USE OF NON-GAAP FINANCIAL INFORMATION: In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-GAAP financial results. Non-GAAP net income and earnings per share exclude certain non-GAAP expenses, net of tax, and include VERITAS results of operations for the applicable periods, including adjustments based on the fair values of assets acquired and liabilities assumed as of the acquisition date of July 2, 2005 and deferred revenue that was eliminated as a result of purchase accounting for the VERITAS acquisition. Symantec's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method Symantec uses to produce non-GAAP results is not computed according to GAAP, may differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can also be found on the investor relations page of Symantec's Web site, along with additional pro forma financial information for the combined company, at www.symantec.com/invest/center.html.

NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Center at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States.

Symantec, the Symantec logo, VERITAS, and the VERITAS logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the United States and certain other countries. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully acknowledged.

                            SYMANTEC CORPORATION
                 GAAP Consolidated Statements of Operations
                   (In thousands, except per share data)


                           Three Months Ended          Six Months Ended
                              September 30,              September 30,
                          --------------------        ------------------
                             2005         2004        2005          2004
                             ----         ----        ----          ----
                                             (unaudited)

Net revenues            $ 1,055,864  $   618,313  $ 1,755,806  $ 1,174,947
Cost of revenues:
  Cost of sales             183,970       96,015      289,752      185,026
  Amortization of
   acquired
   product rights           129,472       13,204      140,485       24,454
                        -----------  -----------  -----------  -----------
    Cost of revenues        313,442      109,219      430,237      209,480
  Gross profit              742,422      509,094    1,325,569      965,467
Operating expenses:
  Sales and marketing       401,674      201,886      612,783      389,818
  Research and
   development              187,313       83,816      278,546      156,700
  General and
   administrative            59,379       27,578       89,767       51,863
  Amortization of other
   intangible assets
   from acquisitions         48,309        1,142       50,048        2,034
  Amortization of
   deferred stock-based
   compensation(1)           13,389          639       16,174          639
  Acquired in-process
   research and
   development              284,000            -      284,000        2,262
  Restructuring               1,452        1,916        4,926        2,776
  Integration planning        5,253            -       13,154            -
  Patent settlement               -            -        2,200            -
                        -----------  -----------  -----------  -----------
    Total operating
     expenses             1,000,769      316,977    1,351,598      606,092
Operating income (loss)    (258,347)     192,117      (26,029)     359,375
  Interest and other
   income, net               39,963       10,723       62,721       21,161
  Interest expense           (7,503)      (5,291)      (7,503)     (10,582)
                        -----------  -----------  -----------  -----------
Income (loss) before
 income taxes              (225,887)     197,549       29,189      369,954
  Provision for income
   taxes                     25,441       61,926       81,884      117,054
                        -----------  -----------  -----------  -----------

Net income (loss)       $  (251,328) $   135,623  $   (52,695) $   252,900
                        ===========  ===========  ===========  ===========
Net income (loss) per
 share - diluted*       $     (0.21) $     0.19   $     (0.06) $      0.35
                        ===========  ===========  ===========  ===========

Shares used to compute
 net income (loss)
 per share - diluted*     1,172,130      736,538      941,727      735,644
                        ===========  ===========  ===========  ===========
----------------------
(1) Amortization of deferred stock-based compensation is allocated
    as follows:

Sales and marketing     $     4,457  $       246  $     5,263  $       246
Research and development      6,763          337        7,868          337
General and
 administrative               2,169           56        3,043           56
                        -----------  -----------  -----------  -----------
                        $    13,389  $       639  $    16,174  $       639
                        ===========  ===========  ===========  ===========

*Share and per share amounts for the three and six months ended September
30, 2004 retroactively reflect the two-for-one stock split effected as a
stock dividend, which occurred on November 19, 2004.   For the three and
six months ended September 30, 2004, diluted net income per share is
calculated using the if-converted method.  Under this method, the
numerator excludes the interest expense from the 3% convertible
subordinated notes, net of income tax, of $3.6M and $7.2M for the three
and six months ended September 30, 2004, respectively, and the denominator
includes shares issuable from the assumed conversion of the 3% convertible
subordinated notes.


                          SYMANTEC CORPORATION
                      Consolidated Balance Sheets
                 (In thousands, except per share data)


                                              September 30,     March 31,
                                                  2005            2005
                                              ------------    ------------
                                               (Unaudited)
ASSETS
Current assets:
  Cash and short-term investments             $  4,433,332    $  3,206,587
  Trade accounts receivable, net                   444,120         285,325
  Inventories                                       14,024          19,118
  Current deferred income taxes                    146,305          97,279
  Other current assets                             196,160          79,973
                                              ------------    ------------
    Total current assets                         5,233,941       3,688,282
Property and equipment, net                        863,216         382,689
Acquired product rights, net                     1,294,374         127,619
Other intangible assets, net                     1,496,517          30,739
Goodwill                                         9,933,776       1,365,213
Other long-term assets                              45,588          19,679
                                              ------------    ------------
                                              $ 18,867,412    $  5,614,221
                                              ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Convertible subordinated notes              $    502,000    $          -
  Accounts payable                                 162,688          74,685
  Accrued compensation and benefits                248,331         140,543
  Current deferred revenue                       1,379,403       1,215,537
  Other accrued expenses                           321,161          91,033
  Income taxes payable                             283,031         179,225
                                              ------------    ------------
    Total current liabilities                    2,896,614       1,701,023
Long-term deferred revenue                         132,606         114,724
Long-term deferred tax liabilities                 708,910          88,613
Other long-term obligations                         40,867           4,408
Stockholders' equity:
  Common stock                                      11,171           7,105
  Capital in excess of par value                13,967,035       2,412,947
  Accumulated other comprehensive income           160,364         191,938
  Deferred stock-based compensation                (62,312)        (21,070)
  Retained earnings                              1,012,157       1,114,533
                                              ------------    ------------
    Total stockholders' equity                  15,088,415       3,705,453
                                              ------------    ------------
                                              $ 18,867,412    $  5,614,221
                                              ============    ============


                          SYMANTEC CORPORATION
       Reconciliation of Consolidated Statements of Operations to
                   Non-GAAP Statements of Operations
                 (In thousands, except per share data)
                              (Unaudited)

                  Three Months Ended September 30, 2005
                     GAAP         Non-GAAP
                   Symantec*    Adjustments     Non-GAAP
                  -----------   -----------   -----------
Financial
 Statement
 Information
Net
 revenues(1)      $ 1,055,864   $   136,280 A $ 1,192,144
Cost of
 revenues:
  Cost of
   sales(1)           183,970                     183,970

  Amortization
   of acquired
   product
   rights(1)          129,472      (129,472)B           -


                  -----------   -----------   -----------
    Total cost
     of
     revenue(2)       313,442      (129,472)      183,970
  Gross profit(2)     742,422       265,752     1,008,174
Operating
 expenses:
  Sales and
   marketing(1)       401,674          (770)C     400,904

  Research and
   development(1)     187,313          (757)C     186,556

  General and
   administrative(1)   59,379        (1,525)C      57,854

  Amortization of
   other
   intangibles
   from
   acquisitions(1)     48,309       (48,309)B           -


  Amortization of
   deferred stock-
   based
   compensation(1)     13,389       (13,389)D           -
  Acquired
   in-process
   research and
   development(1)     284,000      (284,000)B           -
  Restructuring(1)      1,452        (1,452)E           -
  Integration
   planning(1)          5,253        (5,253)F           -
                  -----------   -----------   -----------
    Total
     operating
     expenses(2)    1,000,769      (355,455)      645,314
                  -----------   -----------   -----------
Operating income
 (loss)(2)           (258,347)      621,207       362,860
  Interest and
   other income,
   net(1)              39,963                      39,963
  Interest
   expense(1)          (7,503)                     (7,503)

                  -----------   -----------   -----------
Income (loss)
 before income
 taxes(2)            (225,887)      621,207       395,320
Provision for
 income taxes(1)       25,441        97,107G      122,548

                  -----------   -----------   -----------
Net income
 (loss)(2)        $  (251,328)  $   524,100   $   272,772
                  -----------   -----------   -----------

Net income (loss)
 per share:
  Diluted(2)***   $     (0.21)                $      0.23

Shares used to
 compute net
 income (loss)
 per share:
  Diluted(1)***     1,172,130                   1,205,052


                         Three Months Ended September 30, 2004
                     GAAP                       Non-GAAP
                   Symantec*     VERITAS**    Adjustments    Non-GAAP
                  -----------   -----------   -----------   -----------
Financial
 Statement
 Information
Net revenues(1)   $   618,313   $   485,034 H $         -   $ 1,103,347
Cost of revenues:
  Cost of
   sales(1)            96,015        75,690 H        (901)D     171,789
                                        (66)J
                                        901 K
                                        (52)L
                                        202 M

  Amortization of
   acquired
   product
   rights(1)           13,204         4,055 H     (85,355)B           -
                                     (4,055)I
                                     72,151 N
                  -----------   -----------   -----------   -----------
    Total cost of
     revenue(2)       109,219       148,826       (86,256)      171,789
  Gross profit(2)     509,094       336,208        86,256       931,558
Operating
 expenses:
  Sales and
   marketing(1)       201,886       151,580 H                   352,833
                                       (981)J
                                        (28)L
                                        376 M
  Research and
   development(1)      83,816        83,580 H                   166,963
                                       (614)J
                                        (58)L
                                        239 M
  General and
   administrative(1)   27,578        46,389 H                    73,536
                                        (24)J
                                       (540)L
                                        133 M
  Amortization of
   other
   intangibles
   from
   acquisitions(1)      1,142         2,409 H     (47,906)B           -
                                     (2,409)I
                                     46,764 N
  Amortization of
   deferred stock-
   based
   compensation(1)        639         4,733 K      (5,372)D           -
  Acquired
   in-process
   research and
   development(1)           -
  Restructuring (1)     1,916                      (1,916)E           -
  Integration
   planning(1)              -                                         -
                  -----------   -----------   -----------   -----------
    Total
     operating
     expenses(2)      316,977       331,549       (55,194)      593,332
                  -----------   -----------   -----------   -----------
Operating income
 (loss)(2)            192,117         4,659       141,450       338,226
  Interest and
   other income,
   net(1)              10,723        10,438 H                    21,161
  Interest
   expense(1)          (5,291)       (6,000)H                   (13,802)
                                     (2,511)O
                  -----------   -----------   -----------   -----------
Income (loss)
 before income
 taxes(2)             197,549         6,586       141,450       345,585
Provision for
 income taxes(1)       61,926        39,299 H      37,434 G     110,587
                                    (28,072)G
                  -----------   -----------   -----------   -----------
Net income
 (loss)(2)        $   135,623   $    (4,641)  $   104,016   $   234,998
                  -----------   -----------   -----------   -----------

Net income (loss)
 per share:
  Diluted(2)***   $      0.19                               $      0.19

Shares used to
 compute net
 income (loss)
 per share:
  Diluted(1)***       736,538                                 1,233,840 P

NOTES:

The above information reflects the combined results of Symantec
Corporation ("Symantec") and VERITAS Software Corporation ("VERITAS"),
including amounts related to the amortization of fair value adjustments
of assets acquired and liabilities assumed by Symantec as of the actual
acquisition date of July 2, 2005. For comparative purposes, the
information presented assumes that the acquisition took place on April 1,
2004.  If the acquisition had taken place on April 1, 2004, the fair
values of the assets and liabilities would have been different and actual
results of operations would have been different from those presented
above.

Additional non-GAAP adjustments consist of: non-cash charges related to
acquisitions, such as the amortization of intangibles and stock-based
compensation expense, and the write-off of in-process research and
development; restructuring charges; integration planning costs; and the
impact of other special items, such as other stock-based compensation
expense, litigation matters, gain/loss on investments and related
adjustments to provision for income taxes on our operating results.
These non-GAAP financial measures are not prepared in accordance with
generally accepted accounting principles and may be different from
non-GAAP financial measures used by other companies. Non-GAAP financial
measures should not be considered a substitute for, or superior to,
measures of financial performance prepared in accordance with GAAP.

(*)   The results of operations include our results for the three months
      ended September 30, 2005 and 2004 and VERITAS beginning from July 2,
      2005
(**)  The results of operations include VERITAS' historical results for
      the three months ended June 30, 2004, including amortization related
      to fair value adjustments based on the fair values of assets
      acquired and liabilities assumed as of the acquisition date of
      July 2, 2005.

(***) Share and per share amounts for the three and six months ended
      September 30, 2004 retroactively reflect the two-for-one stock split
      effected as a stock dividend, which occurred on November 19, 2004.
      For the three and six months ended September 30, 2004, diluted net
      Income per share is calculated using the if-converted method. Under
      this method, the numerator excludes the interest expense from the 3%
      convertible subordinated notes, net of income tax, of $3.6M and
      $7.2M for the three and six months ended September 30, 2004,
      respectively, and the denominator includes shares issuable from the
      assumed conversion of the 3% convertible subordinated notes.

            Footnotes:
            1 Symantec includes these non-GAAP financial measures because
              we believe these measures are useful to investors in that
              they allow for greater transparency to certain line items in
              our financial statements.  We have historically reported
              similar non-GAAP financial measures to our investors and
              believe that the inclusion of comparative numbers provides
              consistency in our financial reporting. Investors are
              encouraged to review the reconciliation of the non-GAAP
              financial measures to the most directly comparable GAAP
              financial measures as provided herein.
            2 Symantec's management refers to these non-GAAP financial
              measures, such as non-GAAP operating margins and net income,
              in making operating decisions because the measures provide
              meaningful supplemental information regarding our
              operational performance and our ability to invest in
              research and development and fund acquisitions and capital
              expenditures. In addition, these non-GAAP financial measures
              facilitate management's internal comparisons to our
              historical operating results and comparisons to competitors'
              operating results. Investors are encouraged to review the
              reconciliation of the non-GAAP financial measures to the
              most directly comparable GAAP financial measures as provided
              herein.

            A To include VERITAS' deferred revenue that was excluded as a
              result of adjustments to fair value.
            B To exclude non-cash charges of amortization of acquired
              product rights, amortization of other intangible assets and
              the write-off of acquired in-process research and
              development.
            C To exclude executive incentive bonuses related to the
              VERITAS acquisition.
            D To exclude amortization of deferred stock-based
              compensation.
            E To exclude charges relating to restructuring.
            F To exclude the Symantec and VERITAS integration planning
              costs.
            G To adjust the provision for income taxes to reflect the
              effect of the Non-GAAP adjustments on net income (loss).
            H To include VERITAS' historical results of operations for
              the three months ended June 30, 2004.
            I To eliminate VERITAS' historical amortization of developed
              technology and other intangible assets.
            J To eliminate VERITAS' historical amortization of deferred
              stock-based compensation.
            K To amortize deferred stock-based compensation related to
              the VERITAS acquisition.
            L To amortize VERITAS' lease obligation in excess of fair
              value.
            M To record additional depreciation expense on VERITAS'
              property and equipment as a result of the adjustment to
              fair value.
            N To amortize acquired product rights and other intangible
              assets related to the VERITAS acquisition.
            O To amortize the discount on VERITAS' convertible
              subordinated debt as a result of adjustment to fair value.
            P Diluted shares are equal to Symantec historical shares
              plus VERITAS historical shares multiplied by the exchange
              ratio of 1.1242.


                           SYMANTEC CORPORATION
   Reconciliation of Consolidated Statements of Operations to Non-GAAP
                         Statements of Operations
                 (In thousands, except per share data)
                               (Unaudited)

                                Six Months Ended September 30, 2005
                            GAAP                     Non-GAAP
                          Symantec*   VERITAS**    Adjustments   Non-GAAP
                         ----------   ----------   ----------   ----------
Financial Statement
 Information
Net revenues (1)         $1,755,806   $  559,258 A $  136,280 J $2,451,344
Cost of revenues:
   Cost of sales (1)        289,752       87,657 A       (901)K    376,157
                                            (401)B
                                             901 C     (1,057)L
                                             (52)D
                                             258 E
   Amortization of
    acquired product
    rights (1)              140,485        7,424 A   (212,636)M          -
                                          (7,424)F
                                          72,151 G
                         ----------   ----------   ----------   ----------
      Total cost of
       revenue (2)          430,237      160,514     (214,594)     376,157
   Gross profit (2)       1,325,569      398,744      350,874    2,075,187
Operating expenses:
   Sales and
    marketing (1)           612,783      165,652 A     (3,094)L    773,607
                                          (1,396)B       (770)N
                                             (28)D
                                             460 E
   Research and
    development (1)         278,546       97,510 A     (2,700)L    371,512
                                          (1,331)B       (757)N
                                             (58)D
                                             302 E
   General and
    administrative (1)       89,767       87,907 A     (1,525)N    140,981
                                             (60)B    (30,000)O
                                            (540)D     (4,826)L
                                             258 E
   Amortization of other
    intangibles from
    acquisitions (1)         50,048        2,430 A    (96,812)M          -
                                          (2,430)F
                                          46,764 G
   Amortization of
    deferred stock-based
    compensation (1)         16,174        4,733 C    (20,907)P          -
   Acquired in-process
    research and
    development (1)         284,000                  (284,000)M          -

   Restructuring (1)          4,926                    (4,926)Q          -
   Integration
    planning (1)             13,154                   (13,154)L          -
   Patent settlement (1)      2,200                    (2,200)R          -
                         ----------   ----------   ----------   ----------
      Total operating
       expenses           1,351,598      400,173     (465,671)   1,286,100
                         ----------   ----------   ----------   ----------
Operating income
 (loss) (2)                 (26,029)      (1,429)     816,545      789,087
   Interest and other
    income, net (1)          62,721       15,532 A                  78,253
   Interest expense (1)      (7,503)      (5,198)A                 (15,212)
                                          (2,511)H
   Gain on strategic
    investments (1)               -          732 A       (732)S          -
                         ----------   ----------   ----------   ----------
Income (loss) before
 income taxes (2)            29,189        7,126      815,813      852,128
Provision for income
 taxes (1)                   81,884       47,042 A    166,225 I    268,727
                                         (26,424)I
                         ----------   ----------   ----------   ----------
Net income (loss) (2)    $  (52,695)  $  (13,492)  $  649,588   $  583,401
                         ----------   ----------   ----------   ----------

Net income(loss) per
 share:
   Diluted (2)****       $    (0.06)                            $     0.60

Shares used to compute
 net income (loss) per
 share:
   Diluted (1)****          941,727                                971,042


                                Six Months Ended September 30, 2004
                            GAAP                     Non-GAAP
                          Symantec*    VERITAS***  Adjustments   Non-GAAP
                         ----------   ----------   ----------   ----------
Financial Statement
 Information
Net revenues (1)         $1,174,947   $  970,781 A              $2,145,728
Cost of revenues:
   Cost of sales (1)        185,026      151,052 A     (1,802)K    336,080
                                            (303)B
                                           1,802 C
                                            (104)D
                                             409 E
   Amortization of
    acquired product
    rights (1)               24,454        7,879 A   (214,656)M          -
                                          (7,879)F
                                         190,202 G
                         ----------   ----------   ----------   ----------
      Total cost of
       revenue (2)          209,480      343,058     (216,458)     336,080
   Gross profit (2)         965,467      627,723      216,458    1,809,648
Operating expenses:
   Sales and
    marketing (1)           389,818      294,618 A                 681,261
                                          (3,862)B
                                             (56)D
                                             743 E
   Research and
    development (1)         156,700      163,504 A                 318,727
                                          (1,836)B
                                            (116)D
                                             475 E
   General and
    administrative (1)       51,863       94,138 A                 144,426
                                            (768)B
                                          (1,080)D
                                             273 E
   Amortization of other
    intangibles from
    acquisitions (1)          2,034        4,803 A    (95,562)M          -
                                          (4,803)F
                                          93,528 G
   Amortization of
    deferred stock-based
    compensation (1)            639        9,466 C    (10,105)P          -
   Acquired in-process
    research and
    development (1)           2,262          400 A     (2,262)M          -
                                            (400)F
   Restructuring (1)          2,776                    (2,776)Q          -
   Integration
    planning (1)                  -                                      -
   Patent settlement (1)          -                                      -
                         ----------   ----------   ----------   ----------
      Total operating
       expenses             606,092      649,027     (110,705)   1,144,414
                         ----------   ----------   ----------   ----------
Operating income
 (loss) (2)                 359,375      (21,304)     327,163      665,234
   Interest and other
    income, net (1)          21,161       21,764 A                  42,925
   Interest expense (1)     (10,582)     (11,702)A                 (27,306)
                                          (5,022)H
   Gain on strategic
    investments (1)               -        7,496 A     (7,496)S          -
                         ----------   ----------   ----------   ----------
Income (loss) before
 income taxes (2)           369,954       (8,768)     319,667      680,853
Provision for income
 taxes (1)                  117,054       85,427 A     79,608 I    217,873
                                         (64,216)I
                         ----------   ----------   ----------   ----------
Net income (loss) (2)    $  252,900   $  (29,979)  $  240,059   $  462,980
                         ----------   ----------   ----------   ----------

Net income(loss) per
 share:
   Diluted (2)****       $     0.35                             $     0.38

Shares used to compute
 net income (loss) per
 share:
   Diluted (1)****          735,644                              1,234,364T

The above information reflects the combined results of Symantec Corporation
("Symantec") and VERITAS Software Corporation ("VERITAS"), including
amounts related to the amortization of fair value adjustments of assets
acquired and liabilities assumed by Symantec as of the actual acquisition
date of July 2, 2005. For comparative purposes, the information presented
assumes that the acquisition took place on April 1, 2004.  If the
acquisition had taken place on April 1, 2004, the fair values of the assets
and liabilities would have been different and actual results of operations
would have been different from those presented above.

Additional non-GAAP adjustments consist of: non-cash charges related to
acquisitions, such as the amortization of intangibles and stock-based
compensation expense, and the write-off of in-process research and
development; restructuring charges; integration planning costs; and the
impact of other special items, such as other stock-based compensation
expense, litigation matters, gain/loss on investments and related
adjustments to provision for income taxes on our operating results. These
non-GAAP financial measures are not prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP financial
measures used by other companies. Non-GAAP financial measures should not be
considered a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP.

(*)    The results of operations include our results for the six months
       ended September 30, 2005 and 2004 and VERITAS  beginning from
       July 2, 2005
(**)   The results of operations include VERITAS' historical results for
       the three months ended March 31, 2005, including amortization
       related to fair value adjustments based on the fair values of
       assets acquired and liabilities assumed as of the acquisition date
       of July 2, 2005.
(***)  The results of operations include VERITAS' historical results for
       the six months ended June 30, 2004, including amortization related
       to fair value adjustments based on the fair values of assets
       acquired and liabilities assumed as of the acquisition date of
       July 2, 2005.
(****) Share and per share amounts for the three and six months ended
       September 30, 2004 retroactively reflect the two-for-one stock
       Split effected as a stock dividend, which occurred on November 19,
       2004. For the three and six months ended September 30, 2004,
       diluted net Income per share is calculated using the if-converted
       method.  Under this method, the numerator excludes the interest
       expense from the 3% convertible subordinated notes, net of income
       tax, of $3.6M and $7.2M for the three and six months ended
       September 30, 2004, respectively, and the denominator includes
       shares issuable from the assumed conversion of the 3% convertible
       subordinated notes.


           Footnotes:
           1   Symantec includes these non-GAAP financial measures because
               we believe these measures are useful to investors in that
               they allow for greater transparency to certain line items in
               our financial statements.  We have historically reported
               similar non-GAAP financial measures to our investors and
               believe that the inclusion of comparative numbers provides
               consistency in our financial reporting. Investors are
               encouraged to review the reconciliation of the non-GAAP
               financial measures to the most directly comparable GAAP
               financial measures as provided herein.
           2   Symantec's management refers to these non-GAAP financial
               measures, such as non-GAAP operating margins and net income,
               in making operating decisions because the measures provide
               meaningful supplemental information regarding our
               operational performance and our ability to invest in
               research and development and fund acquisitions and capital
               expenditures. In addition, these non-GAAP financial measures
               facilitate management's internal comparisons to our
               historical operating results and comparisons to competitors'
               operating results. Investors are encouraged to review the
               reconciliation of the non-GAAP financial measures to the
               most directly comparable GAAP financial measures as provided
               herein.

           A   To include VERITAS' historical results of operations for
               applicable periods
           B   To eliminate VERITAS' historical amortization of deferred
               stock-based compensation.
           C   To amortize deferred stock-based compensation related to the
               VERITAS acquisition.
           D   To amortize VERITAS' lease obligation in excess of fair
               value.
           E   To record additional depreciation expense on VERITAS'
               property and equipment as a result of the adjustment to fair
               value.
           F   To eliminate VERITAS' historical amortization of developed
               technology, other intangible assets and the write-off of
               in-process research and development.
           G   To amortize acquired product rights and other intangible
               assets related to the VERITAS acquisition.
           H   To amortize the discount on VERITAS' convertible
               subordinated debt as a result of adjustment to fair value.
           I   To adjust the provision for income taxes to reflect the
               effect of the non-GAAP adjustments on net income (loss).
           J   To include VERITAS' deferred revenue that was excluded as a
               result of adjustments to fair value
           K   To exclude amortization of deferred stock-based
               compensation.
           L   To exclude the Symantec and VERITAS integration planning
               costs.
           M   To exclude non-cash charges of amortization of acquired
               product rights, amortization of other intangible assets and
               the write-off of acquired in-process research and
               development.
           N   To exclude executive incentive bonuses related to the
               VERITAS acquisition.
           O   To exclude $30 million related to the proposed VERITAS
               settlement with the SEC.
           P   To exclude amortization of deferred stock-based
               compensation.
           Q   To exclude charges relating to restructuring.
           R   To exclude patent settlement costs
           S   To exclude gains/losses on strategic investments.
           T   Diluted shares are equal to Symantec historical shares plus
               VERITAS historical shares multiplied by the exchange ratio
               of 1.1242.

Contact Information